The opinion of the court was delivered by: Judge James B. Zagel
MEMORANDUM OPINION AND ORDER
I previously entered an order granting The Candle Company's ("Candle") Motion for Turnover of Stock in order to satisfy a prior judgment against Jerome Maher. Maher has now filed a motion for reconsideration of that order. For the reasons below, Maher's motion is granted, and The Candle Company's Motion for Turnover of Stock is denied.
In 1993 a judgment of $42,000 was entered against Jerome Maher. Candle is the current owner of that judgment, plus any accrued interest. In January, during an examination pursuant to a citation to discover assets, Maher testified that he and his wife had purchased a cooperative apartment located in Wilmette, Illinois. He and his wife jointly own the 302 shares in the cooperative and a proprietary lease for the unit they reside in.
On April 13, 2006, I entered an order granting The Candle Company's Motion for Turnover of Stock. Maher has now filed a motion for reconsideration of that order, claiming that the shares he and his wife hold in the cooperative effectively represent an interest in a homestead property, such that the shares (and consequently the apartment) may be held in tenancy by the entirety, and cannot be transferred to satisfy his personal debt. This is an appropriate ground for seeking reconsideration. Bank of Waunakee v. Rochester Cheese Sales, Inc., 906 F.2d 1185, 1191 (7th Cir. 1990) (observing that a motion for reconsideration is proper when the court has patently misunderstood a party or committed an error of apprehension).
The substantive rights of the parties in this case are based on Illinois property law. It is my job to apply the rules that I believe the Illinois Supreme Court would apply if this case were before it. See Much v. Pac. Mut. Life Ins. Co., 266 F.3d 637, 643 (7th Cir. 2001). "When the 'state supreme court has not ruled on an issue, decisions of the state appellate courts control, unless there are persuasive indications that the state supreme court would decide the issue differently.'" Id. (quoting Lexington Ins. Co. v. Rugg & Knopp, Inc., 165 F.3d 1087, 1090 (7th Cir. 1999).
Tenancy by the entirety is an estate in real property encoded in the Illinois Joint Tenancy Act, 765 ILCS 1005/1c ("Tenancy Act").*fn1 Only spouses may hold property in this estate, and the property owned must be homestead property. Premier Prop. Mgmt. v. Chavez, 728 N.E.2d 476, 479 (Ill. 2000). Any property held in tenancy by the entirety cannot be sold or transferred to satisfy the debt of only one spouse. Id.
Candle argues that the cooperative is the actual owner of the real property and Maher only owns ordinary shares of stock in the corporation. A share of stock in an ordinary corporation is considered personal property even if the corporation owns land. Mun. Trust & Sav. Bank v. U.S., 114 F.3d 99, 101 (7th Cir. 1997). The share cannot be held in tenancy by the entirety.
Candle is correct in its analysis of whether or not most personal property can be held by tenancy in the entirety, but it fails to even acknowledge a crucial point. Specifically, Candle treats a share in a cooperative apartment as identical to a share of stock in a corporation in all respects. This comparison is not completely accurate. Illinois courts have already recognized the inherently hybrid nature of shares in a cooperative apartment in light of the tension between the owner-tenant and the association itself. See, e.g., Harper Square Hous. Corp. v. Hayes, 713 N.E.2d 666, 669-70 (Ill. App. Ct. 1999); Quality Mgmt. Servs. v. Banker, 685 N.E.2d 367, 369 (Ill. App. Ct. 1997).
Courts have recognized the value of the leasehold interest in the apartment as well. The primary interest of every stockholder in such a corporation is the long-term proprietary lease and the stock is incidental to such purpose and merely affords the practical means of combining an ownership interest with the method of sharing proportionately the assessments for maintenance and taxes.
Sinnissippi Apartments, Inc. v. Hubbard, 448 N.E.2d 607, 611 (Ill. App. Ct. 1983). In addition, "the certificate of incorporation, stock offering prospectus, the stock subscription agreement, and the proprietary lease," should all be read together to determine the relationship between the tenant and the cooperative association. Sinnissippi, 448 N.E.2d at 611.
Admittedly, Sinnissippi, Harper Square, and Quality Mgmt. all deal primarily with the relationship between the shareholder-tenant and the association-owner. In addition, there are cases from other jurisdictions that specifically state that shares in a cooperative association are usually not considered real property. See State Tax Com. v. Shor, 371 N.E.2d 523, 524 (N.Y. 1977). However, even in Shor the court conceded the rule was not absolute, noting that "[f]or some special purposes, the real property aspect may predominate." Id. at 524. In New York tenancy by the entirety is limited to real property. See Goldman v. Goldman, 95 N.Y.2d 120, 122 (N.Y. 2000).
The Illinois Tenancy Act does not limit its reach to real property. The words of the statute itself only refer to "property." See 765 ILCS 1005/1c. It even specifically includes a beneficial interest in a land trust in its use of the word "property." Such an interest is usually considered personal property. See Municipal Trust, 114 F.3d at 101. Also, the legislature has included cooperative apartments in its use of the term "homestead." The homestead exclusion to the enforcement of judgments contained in the Illinois Code of Civil ...